Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the bottom businesses.
The "race to the bottom" is the reason why we don't pay $3000 for a mid-range desktop computer anymore.
If the gov't cleaned up it's act I'd bet you'd hear a lot less of the "my taxes are going to waste".
Plus the usual; politicians might be reaping short-term benefits but making long-term payments that happen long after they leave office.
That said, the connection between the money and the value may not be as clear. It's more holistic than anything else you might spend money on.
In terms of lobbyists or politicians playing funny with these deals, that's more a problem with the gov't than these deals.
I guess my point is that the "race to the bottom" has already born out benefits. This list of "most efficient gov'ts" has Qatar, Singapore and Finland on the list, so it's not like it's already happening.
With this groundwork laid, now I can answer your question. Companies spend their own money to deliver a product or service to market because of the profit associated with the effort. At some point, that effort isn't worth it, and the participation in the race to the bottom ends. Hence, companies that can profit at the end of the race win, and consumers win because the goods or services are much lower priced.
However, governments don't follow the same thought process. When the profit of participating in a market (attracting businesses) disappears or never appears, they don't experience the negative response and therefore don't make the same decisions as companies would. They may stay in this particular market longer than they should and their drive to participate in the market may not be measured in profits. However, somebody is paying for this endeavor. Taxpayers don't get a choice to "opt-out" of these decisions. Further, a fraction of the tax base may want to spend other people's money attracting businesses (via taxes) however very rarely will write a check to do so, indicating it's only worth it if its with other people's money (see #3).
I hope that helps.
I guess my comment back would be it appears that this is an issue with governments, not with competition. I would hope that the government has some incentive to spend tax payers' money wisely (re-election would probably be the only one).
Ignoring the whole "lets give tax breaks to businesses that move here" issue, I think we'd all be better off if there was a strong incentive for the appropriate spending of tax payer money.
I mean Singapore seems to do it reasonably well, why can't we. And yes, I know a little about how Singapore trainings and attracts top talent to government.
Unfortunately (in the USA) due to our current campaign financing situation, lobbying and media outlet consolidation the elected representatives voting to write big government checks are far more beholden to the corporations than to the people, which explains the crazy boondoggles like the TSA and congress buying military hardware the military doesn't even want (causing it to be regifted to local police, causing all sorts of carry-on negative impact).
And then those same corporations/wealthy individuals that profit from this system point to it as an example of how the government can't be trusted with our money and thus shouldn't be allowed to regulate anything they do.
The entire system is just ridiculous at this point and possibly unfixable (without some kind of huge society-shifting event).
People spending company money are sometimes far less thrifty than either people spending their own money or government employees, so I don't think you can rank them based on thriftiness. Nor do established companies necessarily provide better service than government organizations. These things depend more on the particular organization's culture and governance, not on whether it's a business or a government.
Oh, it definitely is. But here's the thing: in this case it's like your salepeople selling below cost at the end of a quarter to meet their targets. That's not good for the company.
States should compete on overall tax, not on exceptions given to a handful of well-connected companies and individuals.
They didn't play the game, they lost. Call car manufacturing a race-to-the-bottom business if you want, but if it's gone it's gone.
Negative how? It's not a choice between a company that pays full taxes and a company that gets a tax break. It's a choice between a plant or an empty patch of desert.
It's not just the plant, either. It's all the ancillary business activity that comes with a billion dollar plant: construction, real estate, raw materials, transportation, food services, advertising, janitorial, office supplies, security, legal services, etc.
All those employees will spend money, too: houses, clothing, food, furniture, entertainment, insurance, cars....
I don't understand why people oppose investment incentives unless they're wealthy enough to not need the additional prosperity.
If I were running a state (or the whole country for that matter), I'd be encouraging business investment like crazy. It's the ticket to prosperity. The Asians get it. Seems like we in the West no longer get it.
I don't know if that worked out, but Barrow County (location of the plant) has a lot more businesses today than it did in 2013 when it opened. That could just be that it also filled out a big retail development (Barrow Crossing) and started on another (https://www.facebook.com/Gateway-at-University-Parkway-14074...)
Further reading: http://www.athensbusiness.org/announcement-profile.php?ID=56
I just find the idea that private businesses are "taking advantage" of governments with these agreements. Really? A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?
But they are taking advantage of a bunch of things; local governments inability to govern certain areas (whether due to state or federal laws) or that the mayor is thinking about election time and who would say jobs are bad?
See race to the bottom. Companies simply shop around for a set of tax breaks that doesn't come with strings attached.
> A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?
You mean people with money are influencing elected officials who need their money to win elections.